The project is being led by OurWorld, a technology venture creator firm, in partnership with the Zanzibari government, and will offer favorable tax rates and a digital residency program for remote workers and businesses.
Near the tip of the Fumba Peninsula, a thumb of land jutting out of Zanzibar Island’s western coast, invisible lines delimit a nondescript rectangle of 71 hectares (175 acres). Right now, nothing is there but dirt and wild vegetation. But in early July, when Florian Fournier guided a small group of technology entrepreneurs across the area, he told them that patch of land would become a Cyber City.
French-born Fournier is the co-founder of OurWorld, a technology venture creator firm headquartered in Mauritius. The company is working with the government of Zanzibar to develop and operate a special economic zone – Dunia Cyber City – aimed at attracting tech workers and businesses to the semi-autonomous region of Tanzania. “They want it to become for East Africa what Singapore became for South-East Asia,” Fournier said in an interview.
The village plans to house some 5,000 to 7,000 people. But many other residents of this city won’t actually live there. For digital nomads around the world living out of a suitcase, it would be an e-residence — one where people navigating multiple tax regimes would find a place to claim residence, and to find alignment in their embrace of “technological sovereignty,” favoring open-source platforms over Big Tech-run ones.
Dunia Cyber City is one of a number of projects inspired by a concept known as “network state.” The movement, backed by influential Silicon Valley figures, has drawn an array of visions for potential technotopias, but one thing undergirds them all: cryptocurrency.
The term “network state” originated in a 2022 book by cryptocurrency entrepreneur Balaji Srinivasan. Srinivasan proposed that ideologically aligned online communities — think vegans, pit bull lovers, or Bitcoin aficionados — unhappy with their countries’ policies should break free and start alternative societies and institutions, eventually underpinned by land purchased across the world. In the long run, Srinivasan’s argument went, these “network states” should aspire to diplomatic recognition on par with nation states.
Srinivasan has publicly called for a “Gray Tribe” of entrepreneurs and innovators to take control of San Francisco from a liberal “Blue Tribe,” in part by allying with local police. But in his book, he was not prescriptive on the specific focus a network state should have, except that it should use cryptocurrency to fully untether itself from state-run central banks. The ideas in his book have caught on among the more libertarian sections of the tech industry, which have long been raring to escape the clutches of governmental regulation.
Fans of network states often envision them as sandboxes whose regulations are tailored to foster untrammeled technological experimentation.
Special economic zones with lower taxes and business-friendly regulations have been around for decades, dotting the planet from China to Latin America. What distinguishes a network state is its aspiration to attract prospective citizens, besides just businesses and industrial facilities, as part of its plan to bring together a collective of like-minded people. Srinivasan himself is doing that with Network School, an outfit he runs out of a Malaysian special economic zone, catering to a techno-optimistic, health-conscious crowd. School members are served meals inspired by the diet of longevity influencer Bryan Johnson, and are rewarded with “Burn NFTs” for completing fitness classes.
Critics of Srinivasan’s idea have sometimes cast it as a techno-elitist pipe dream. Harry Halpin, a researcher in socio-technical systems at Vrije Universiteit Brussel in Belgium, and founder of privacy startup Nym, said that ideas like the network state are a reaction to a growing sense that traditional governments are no longer functional, filtered through an internet-native worldview.
“These people see the nation state as an operating system like Windows or Linux and want to opt out of it and build a better alternative,” Halpin said. “The problem is that many people involved in the network state movement do not have any background in politics. This could be an advantage because they won’t make the same mistakes that have been made for centuries – but it could be a disadvantage because they may unwittingly repeat those mistakes.”
‘Millions of Digital People’
Fournier, a former Apple employee who later grew wary of tech monopolies, said that Srinivasan’s book spoke to him. “I was like, wow, that’s exactly what we’re doing,” he said. “That’s when I got in touch with him.” Srinivasan would end up investing in OurWorld’s decentralized computing venture Threefold, Fournier said, and invited Fournier to speak at his yearly Network State conference in 2024.
Fournier’s Cyber City, designated as the physical side of a “Digital Free Zone” under Zanzibari law, will offer no capital gains or wealth tax and relatively favorable income tax rates: 5% for remote-based tax residents, 15% for physical residents, and a full exemption for companies during the first ten years of operation. Taxes paid by residents will go to the Zanzibari government, while the money made from real estate sales in the city will be reinvested in local startups.
OurWorld’s authority to run and regulate the city – through a joint venture with Zanzibar’s state-owned telecommunication infrastructure agency, ZICTIA – was approved by Zanzibar’s president in November 2024. For Fournier and his co-founder, Kristof De Spiegeleer, that was the crowning moment of a multi-year effort to convince Zanzibar’s government to lay the groundwork for Digital Free Zones, which were enshrined in law in early 2024 as part of a broader effort to transform the area into a tech hub with business-friendly policies and new development.
“I said, ‘What if we bring millions of digital people – not physical – to your island?'” De Spiegeleer recalled telling Zanzibari officials during a meeting in 2022. The initial idea to establish a virtual registry gradually evolved to encompass a physical village, which revolves around a data center using technology from ThreeFold. There are currently about 100 e-residents and 30 businesses claiming digital residence in the city, but partners of the founders said they were just beginning their marketing in January.
De Spiegeleer said he wanted to build a city with an overall commercial value of $1 billion — a nearly fifteen-fold increase over the land’s worth of $70 million — within two years. The government has granted ThreeFold access to the land for 30 years, after which they would have to renew their leasehold to continue operating there. OurWorld and its partners are currently fundraising for the construction of the city from businesses that want to open shop or build their data centers there, real estate investors and prospective residents. People buying land or property in the city will be issued their title deeds as digital tokens similar to NFTs, tradable on cryptocurrency marketplaces – their value presumably waxing or waning in lockstep with Dunia’s economic success.
ZICTIA, the government agency, said in an email that the city “can be pioneer of innovation or invention of technology,” and has prioritized “models for protecting Zanzibar’s social, cultural and natural environment.”
OurWorld is still workshopping what form of local government Dunia should adopt, with a cooperative system a strong favorite. But the administrative scaffolding to run the digital zone is already in place. Its fundamental services will mostly be automated through a software suite OurWorld co-developed with software company Tools for the Commons. The firm, which has offices in Delaware, Brazil and Honduras’s own special economic zone Prospera, specializes in creating digital applications and regulations for special economic zones. “It is a full stack set of regs and software to manage and operate a digital economic zone,” Tools for the Commons founder Hugo Mathecowitsch said of the “operative system” to be deployed in the zone. “It includes trade dispute resolution, payments, company management, taxes, invoices and so on.” Criminal matters will remain the exclusive competence of Zanzibari authorities.
Communal Living or Geopolitical Strategy?
While the number of initiatives claiming to be working on network state-adjacent projects has burgeoned since 2022, they all come in different flavors, and often stray from the blueprint in Srinivasan’s book. Fournier and De Spiegeleer are hardly planning to secede from the government that granted them land, instead actively partnering with Zanzibari leaders. “[OurWorld’s project] has a lot of similar benefits and goals, but I wouldn’t say that it translates one to one [to a network state],” de Spiegeleer said.
Prospera, the Honduran special economic zone whose investors include a fund backed by Silicon Valley grandees Marc Andreessen and Peter Thiel, in addition to Srinivasan himself, is often associated with the network state movement on account of its tech connections. The zone, which comprises over 1,000 acres on the paradisiacal island of Roatan, features an e-residency program that has attracted some 2,000 virtual Prosperans, compared with around 300 physical residents. But the project, which turned sour after the Honduran government changed, predates Srinivasan’s book, and rejects the “network state” label.
Get the Bonus Points newsletter.
Get the Bonus Points newsletter.
Get the Bonus Points newsletter.
Go in-depth on Bloomberg’s games, Pointed and Alphadots, with quizmaster Aimee Lucido.
Go in-depth on Bloomberg’s games, Pointed and Alphadots, with quizmaster Aimee Lucido.
Go in-depth on Bloomberg’s games, Pointed and Alphadots, with quizmaster Aimee Lucido.
Bloomberg may send me offers and promotions.
Plus Signed UpPlus Sign UpPlus Sign Up
By submitting my information, I agree to the Privacy Policy and Terms of Service.
Other network state projects focus less on land and more on knitting together a community that might blossom into a polity. The most prominent such case is Zuzalu, a format for multi-week, community-building events initiated by Vitalik Buterin, the inventor of the Ethereum cryptocurrency. Buterin held the first Zuzalu event in 2023 as a social experiment inspired by Srinivasan’s book: He invited a few hundred people from the cryptocurrency world, longevity research milieu and online rationality galaxy – three online tribes Buterin identified with — to a seaside resort in Montenegro, and waited. (Fournier was among the attendees. So was, fleetingly, the pop musician Grimes.)
Over two months, the people Buterin had invited appeared to jell into a new tribe of sorts. After Zuzalu ended in May 2023, scores of Zuzalu-inspired “pop-up city” gatherings started mushrooming across all continents. The franchise is decentralized and leaderless, but these events are typically organized by attendees of the O.G. Zuzalu in Montenegro, and often bankrolled by Buterin.
Right now, Zuzalu pop-up cities are more akin to overlong technology and culture conferences than city-founding strategy sessions, but some of them have drafted plans to put down roots – with Buterin’s endorsement. In May, one of these projects, called Zuitzerland, announced it was gunning for a “permanent hub” to foster experimentation on decentralized and privacy-enhancing technologies. Whether Zuizterland and other potential Zuzalu hubs will actually resemble cities or rather research labs with a dollop of communal living remains to be seen.
Other projects are way more optimistic about gaining geopolitical recognition quickly.
Mathecowitsch, the Tools for the Commons founder, said his company was co-developing the technology for several new special economic zones that will share the same governing software stack and charter. The two projects at the most advanced stage are in Qatar and in Rio de Janeiro’s Mata Maravilha port area. The goal is for each host country to recognize the zone as a diplomatic entity, and then to grant the zone in the other country some diplomatic recognition. “These will be two founding nodes of a network of maybe 10 to 20 nodes in the next decade,” Mathecowitsch said. “The big vision is to enable a network of connected cities and that would share the same charter almost like a decentralized United States.”
Read more on Bloomberg Business
